Instructions

ZOOM IN by clicking on the page. A slider will appear, allowing you to adjust your zoom level. Return to the original size by clicking on the page again.

MOVE the page around when zoomed in by dragging it.

ADJUST the zoom using the slider on the top right.

ZOOM OUT by clicking on the zoomed-in page.

SEARCH by entering text in the search field and click on "In This Issue" or "All Issues" to search the current issue or the archive of back issues
respectively.
.

PRINT by clicking on thumbnails to select pages, and then press the
print button.

SHARE this publication and page.

ROTATE PAGE allows you to turn pages 90 degrees clockwise or counterclockwise.Click on the page to return to the original orientation. To zoom in on a rotated page, return the page to its original orientation, zoom in, and
then rotate it again.

CONTENTS displays a table of sections with thumbnails and descriptions.

ALL PAGES displays thumbnails of every page in the issue. Click on
a page to jump.

DELIVERING NEW BENEFITS TO THE
INDUSTRY
This optimism probably stems from the potential
of emerging distributed ledger technologies
to significantly improve the services custodians
provide to super funds and other institutional
investors. These perceived benefits will likely
occur in a wide variety of areas, particularly in
clearing, settlement, recording of ownership, and
safekeeping of assets.
While the benefits may vary depending on
the specific area, in general, distributed ledger
technology (DLT) could provide benefits in four
broad categories:
• trust – shared ledger ensures multiple parties
are viewing the same representation of the
data
• efficiency – data reconciliation needs can
be dramatically reduced through data
transparency and consistency
• security – native cryptographic functions
built into distributed ledgers allow enhanced
lineage tracking and audit reporting through
immutable data records
• automation – smart contracts operating on
consistent and immutable data can usher in
a new paradigm of automation.
It is thought the reductions in costs, brought
about by reduced manual processes, will create
better data assurance, higher transparency,
reduced settlement risk, new products and
services, and could benefit asset owners
worldwide, as well as the investing public.
BUILDING A TECHNOLOGY-RECEPTIVE
ORGANISATION
Despite the benefits, industry-wide adoption of
blockchain faces a number of challenges, such
as regulatory acceptance and agreement on a
technology. Industry-wide adoption will require
regulators and industry participants to support
standardisation and the development of protocols
that will permit and help promote interoperability
between other ledgers and networks. This
collaboration is a work in progress.
In 2015, State Street launched the Emerging
Technologies Center (ETC), to identify, explore
and prototype emerging and disruptive
technologies that could have a long-term
impact on the financial industry. Starting with
blockchain and DLT, the ETC is experimenting
with concepts such as data protection and
data immutability, cryptographic data lineage
tracking, system automation through smart
contracts, decentralised and distributed message
communications and reference data repositories.
Additionally, the ETC will explore technologies
including machine learning and artificial
intelligence for predictive analytics services
for portfolio and risk management to create
customised investment portfolios based on the
user’s risk tolerance and goals.
COLLABORATING IS BLOCKCHAIN’S WAY
AHEAD
Much of the benefits of DLT applications such as
blockchain will be derived through collaborative
partnerships. For example, State Street was a
founding member of the R3 consortium – a
partnership of over 50 leading financial and other
global institutions actively exploring DLT solutions.
Through these collaborative efforts, State Street
hopes to create a common industry standard DLT
platform, which can be used on a global scale to
drive blockchain and other emerging technologies
forward, thus delivering the benefits that
blockchain and these technologies have promised
to offer.
John R. Burnett is managing director, emerging
technologies center, State Street.
Superfunds December 2016